Questions tagged [pricing.]

EchoSolitude Mon Sep 23 2024 | 5 answers 958

Could you please elaborate on what determines the fair price of a futures contract? Is it solely based on the underlying asset's current market value, or are there other factors that contribute to it? Are there any specific formulas or models used to calculate this fair price? Furthermore, how does the market's perception of future events, such as economic trends or geopolitical developments, impact the fair price of a futures contract? I'm particularly interested in understanding the dynamics behind this pricing mechanism.